An Analysis Of UMUC Haircuts

Introduction

Established by Myra Morningstar in 1995, UMUC Haircuts starts out with a competitive advantage from an established service and loyal customer base having been the only barbershop within a ten-mile radius at that time. However, in a business setting where new competitors are arriving on the scene rapidly, UMUC Haircuts has much to benefit from upgrading its business practices with information systems.

Applying Porter’s Five Forces Analysis

In business landscape where potential customers have many barbershops to choose from, one hurdle for UMUC Haircuts is the high Buyer Power force it must overcome. The buyers are UMUC Haircuts’ customers; they expect and demand good professional service (haircut, styling, etc.). Customers’ needs have to be met otherwise, they will look for another business that can either cater for these needs or do it in a better way.

For the simple reason that there are a wide range of suppliers from which to purchase, UMUC Haircuts will have a low Supplier Power force to contend with. In addition, by arranging to use multiple suppliers, UMUC Haircuts can mitigate the power of suppliers.

The threat of substitute services is high because of the same reasons the buyer power is high. There are many other businesses offering the same services that can make UMUC Haircuts’ services less desirable. However, this threat is different from buyer power in that it must be considered in the context of what specific services UMUC Haircuts offers. If UMUC Haircuts can offer a unique service that no other business does, then UMUC Haircuts has effectively lowered this force.

In addition to high buyer power, the large number of barbershops also means a high rivalry among existing competitors. Prices must be com...

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... 21st century. Thus, a loyalty program needs to be improved upon and this can be done through the use of technology. A customer relation management (CRM) system can be installed and used to manage the UMUC Haircuts’ interactions with customers. Customer contact information and a history of their visits are recorded, when they check out with the point of sale system which is integrated with the CRM. This will provide a complete overview of the customer’s profile including their preference. With such a system in place, UMUC Haircuts can provide special offers such as coupons around the time of the customer’s birthday or upon visiting a specific number of times.

The following will be included in each subsequent staged assignment:

GENERIC STRATEGY: High Cost – Broad Market

STRATEGIC BUSINESS AREA: Customer Management

PROCESS TO BE IMPROVED: Loyalty Program Development